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1976 Campaign Transition File
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Budget, 1978
Folder Citation: Collection: Office of Staff Secretary; Series: 1976 Campaign Transition File;
Folder: Budget, 1978; Container 1
To See Complete Finding Aid:
http://www.jimmycarterlibrary.gov/library/findingaids/Staff_Secretary.pdf
C
Budget Actions Needed
Immediately after January 20, 1977
December 10, 1976
BUDGET ACTIONS NEEDED IMMEDIATELY AFTER
JANUARY 20, 1977
Two factors suggest that President Carter should submit
his revisions of the 1978 budget to the Congress by February
15, 1977. First, he has made a commitment to do so and,
second, the timing of the congressional budget process is
such (Tab A) that the Carter budget for fiscal year 1978
should be submitted by around February 15 if it is to have
maximum influence on the outcome of the congressional budget
process. The following discussion assumes that President
Carter will aim for a February 15 transmittal. As will be
seen, the schedule required to make a February 15
transmittal is very tight. It would be very desirable, if
agreement can be reached with the Congress, to transmit the
revisions at least a few days later than February 15.
There are 26 days (including Saturdays and Sundays)
between January 20 and February 15, and at least three of
these days will be needed for proofing and printing the
approved budget document. This extreme shortage of time
conditions the nature of the decisions that can be made, and
makes it essential that actions that must be taken to assure
timely transmittal of the Carter budget be planned and
carried out on schedule.
These actions are:
1. Decide upon a fiscal policy within the context
of an overall economic policy for calendar
years 1977 and 1978 -- and taking into account
President Carter's fiscal objectives for
fiscal year 1979 and later years.
2. Decide upon the economic assumptions needed to
make estimates of receipts and major outlays.
(Tab B.)
3. Decide upon tax policy and receipts estimates.
(Tab C.)
4. Decide upon broad program levels and outlay
totals.
-2-
5. Reach agreement with the Congress on what the
Congress will accept on February 15, and what
it will accept later, as the appropriate
documentation to support the new President's
budget proposals.
6. If all of the information needs of the
Congress cannot be met in the three weeks that
will be available after January 20, develop
(and reach agreement with the Congress on) a
phased plan for providing limited data within
the scope of the February 15 report, with more
extensive backup to follow.
7. Decide upon the allocation of the budget
totals among their various parts (i.e.,
agencies and programs), which -- in turn --
requires determining:
(a) the degree of participation by agencies
(presumably, the maximum consistent with
the time available). With a February 15
deadline, it might be necessary to limit
this participation to discussions with
Cabinet officers, major agency heads, and
their immediate staff. (In this
connection, it would be very useful for
all Carter Administration appointees to
departments and major agencies to
familiarize themselves as quickly and as
thoroughly as they can with the recent
budgets and the November current services
estimates for their departments and
agencies.)
(b) guidelines (e.g., specific dollar targets)
for the agencies, to set limits on what
they should request; and
(c) whether to support or withdraw, in whole
or in part, the rescissions and deferrals
that will be pending before the Congress.
8. Prepare, on the schedule agreed upon by the
Congress, the documentation (e.g., the budget
supplementals, amendments, rescission and
deferral messages, and computer data tapes)
needed to support the February 15 budget.
-3-
This supporting information must be at
account-level detail -- or finer.
9. Draft, revise, and obtain clearance of the
document that will be President Carter's
budget. A suggested outline of such a
document is shown at Tab D.
The fifth and eighth points are prerequisite to timely
review by the Congress of the new President's
recommendations. The seventh through ninth points pertain
to the major part of the budget preparation process in the
executive branch. These points are the main focuses of the
remainder of this memorandum.
The Setting
The situation that the new Administration will face is
as follows. The Ford budget will include:
-- specific appropriations requests, along with
proposed statutory language, for programs
under existing substantive law; and
-- proposals to modify existing substantive law
or to enact new laws (both of which are
identified in the budget as "proposed for
later transmittal").
The budget will also include a list of budget restraint
proposals from measured current services levels. In
addition, OMB staff will be tracking all deviations -- both
restraint and additions. This will permit a calculation of
budget totals that are roughly comparable to current
services estimates.
Rules of the Game
Under a long-standing interpretation of the Budget and
Accounting Act, the appropriations requests and related
proposed statutory language included in a President's budget
can be modified only by Presidential transmittal of revised
appropriation language. (Tab E.) Appropriation requests
and the language supporting them are presented in account-
level detail. Similarly, except for routine release of
deferred funds, withdrawal or modification of proposed
-4-
rescissions and deferrals (Tab F) that are pending before
the Congress requires formal Presidential action, viz.,
formal transmittal of a supplementary rescission or deferral
message. Here, too, account-level detail is required.
On the other hand, proposals to modify substantive law
or to enact new laws could be withdrawn by ignoring them or
by specifically rejecting them in the new, abbreviated
budget submission to the Congress. (Tab G.) Proposals for
new laws (and changes in proposals to modify substantive
law) could also be made by outlining them in the abbreviated
budget submission -- with proposed specific legislative
language (and 5-year projections of estimated budget
authority and outlays) to be submitted at a later date.
Supporting Data
Under requirements stemming from the Congressional
Budget Act of 1974, the Congress insists upon having both
appropriation requests and substantive legislation proposals
supported by rather extensive accounting detail, generally
at well below the account level. OMB is already being
pressed by the Congressional Budget Office for access to
detail on the Ford budget earlier than January 17, the date
on which that budget is scheduled to be transmitted. (The
information is needed to permit the President's budget
request to be distributed among the legislative committees
and the appropriations subcommittees.)
Supporting data for Carter's February 15 budget cannot
be provided on February 15 in the detail that normally
accompanies the President's budget in January unless the new
President agrees with most of the Ford budget. It is
critically important, therefore, that an understanding be
reached between the President-elect (and his immediate
staff) and the congressional leadership (including the
Chairmen of the Appropriations and Budget Committees) on
what will be acceptable. Staff consultations involving the
Transition Team, OMB, the Congressional Budget Office, and
the Appropriations and Budget Committees would be a useful
complement.
-5-
Agency Participation
Ideally, the translation of a President's overall
budget policy into program decisions would involve virtually
every major policy official in the Government.
Institutional procedures have been established for assuring
that the views of each agency head on that agency's budget
request are communicated to the President when he makes his
budget decisions and, conversely, that agency policy
officials and staff, and members of the Congress have a
clear understanding of what the President's position is on
executive branch appropriations requests. These procedures
work well, but they are time consuming -- so much so, in
fact, that it is doubtful that they can be completed if the
February 15 transmittal date is to be met.
Serious risks are inherent in the shortcuts that must
be taken to make this transmittal date. For example, if the
Carter budget is not specified at a low level of detail,
there will be an inclination on the part of agencies,
interest groups, and the Congress to attribute Presidential
support to their preferred initiatives. As a result, unless
the Presidential imprimatur is established firmly on budget
detail, the 1978 budget totals may tend to creep upward
beyond the intended level. (Here is where the new
congressional budget procedures are likely to be a valued
ally of the President.)
Moreover, the House and Senate Appropriations
Committees will begin overview hearings on the 1978 budget
in the last week of January. Agency hearings before those
Committees will begin shortly thereafter. Decisions on the
Carter budget must somehow involve at least Cabinet and
major agency participation so as to gain their understanding
and support of the budget, and to provide a basis for the
budget justifications required by the Appropriations
Committees. Support in general will be uncertain and
problematic if detailed budget decisions are not made in
conjunction with the Cabinet and agency heads.
Nonetheless, the short time available for preparing the
revised budget will limit seriously the terms on which
agencies can participate in the decision process.
Specifically, giving agencies unconstrained freedom to
propose revisions in their budgets is inconsistent with
transmitting a revised budget on February 15; their budget
requests could not go through even a hurried Presidential
review process in time. For this reason, ground rules
-6-
(i.e., restraints) under which agency recommendations are to
be submitted will have to be developed. Possible guidelines
include: (a) specific dollar targets for each major agency,
and (b) zero change from agency base amount determined by
deciding which Ford proposals are not acceptable, but the
development of final ground rules may not be possible until
after the Ford budget is available.
One way to approach this task would be to concentrate
on the deviations from current services levels in the Ford
budget. The President, the OMB Director, and the Cabinet
and major agency heads could decide:
-- those reductions or increases they wish to
agree to;
-- those they wished to restore (or decrease) to
a current services level; or
-- those cases deserving special treatment,
either because neither the proposed level nor
the current services level is deemed
appropriate, or because the new Administration
wishes to propose new programs or new
reductions not included in the Ford budget.
As a practical matter, the third category should be held to
a minimum for a February 15 presentation.
-7-
Next Steps
As is suggested above, the February 15 transmittal date
means that, unless there are only minor changes or a limited
number of changes from the Ford budget, the document that is
submitted then will have to be a summary version, with
supporting detail to follow. A schedule consistent with
this approach, and with a March 15 completion date for
transmittal of the supporting detail, is shown at Tab H.
Clearly, any decisions that can be made by the
President-elect and his designees before January 20 will
ease the crunch that will follow January 20. This is
particularly true for the decisions concerning economic
assumptions, receipts estimates, and major programs. Even
when all the decisions have been made, there will remain the
time-consuming task of translating them into the words and
figures required under the congressional budget process.
8 Attachments
-8-
A
December 10, 1976
Tab A
KEY DATES IN THE CONGRESSIONAL BUDGET PROCESS
FOR FISCAL YEAR 1978
The key dates of the congressional budget process
during the first six months of calendar year 1977 are:
The Congress receives the Ford budget
January 17
Appropriations/Budget Committees' overview
hearings
late January
Appropriations Committees begin agency
hearings
early February
The Congress receives the Carter budget
proposals
February 15
The Congress receives the detailed
supporting documentation for the Carter
budget
March 15
Appropriations Committees and substantive
committees report to Budget Committees
on recommended spending levels
March 15
Congressional Budget Office submits report
to Budget Committees on fiscal policy
and national budget priorities
April 1
Budget Committees hold hearings
March 15-April 15
Budget Committees report first concurrent
resolution on the budget for 1978 to
their respective Houses
April 15
Legislative committees report bills on
new budget authority
May 15
The Congress completes action on the
first concurrent resolution
May 15
Appropriations Committees report bills
early June
A-2
The congressional budget process places significant
constraints upon both the timing and format of a Carter
budget for fiscal year 1978. The work on the first
concurrent resolution for 1978 begins in the Appropriations
and legislative committees soon after the Congress convenes.
These committees prepare reports to be submitted to the
House and Senate Budget Committees by March 15 identifying
specific funding decisions under consideration for 1978. In
addition, the Congressional Budget Office is required to
submit by April 1 a report on fiscal policies and national
budget priorities. for the budget year. The report takes
into account proposals included in the President's budget.
It, together with the committee reports, was intended to be
a major resource for the Budget Committees in their
formulation of the first concurrent resolution. Actually,
April 1 proved to be much too late. Last year, the formal
report by CBO was dated March 15, and earlier versions were
made available to the Budget Committees.
If the Carter budget is to have its maximum influence
upon this initial stage of the process, the budget proposals
must reach the Congress by February 15. While it is
arguable that Administration proposals need not be reflected
in the committee reports to be considered in later
deliberations on the first concurrent resolution, they will
have less influence if they are not available for
consideration by the committees before these reports are
filed. Administration proposals must reach the Congress by
mid-March at the very latest if the transition budget is to
have significant impact upon Budget Committee hearings.
These hearings are the key point in formulation of the first
concurrent resolution.
Remaining Congressional Review of the 1977 Budget
Although the congressional budget process does not
identify specific dates for further review of 1977, the 94th
Congress adjourned without acting upon certain 1977 issues
-- including Temporary Employment Assistance, higher
education, health programs funding, and 1977 pay
supplementals. In a spring supplemental, the Congress will
be relating later action on these issues to the Second
Concurrent Resolution for 1977.
While the main focus of attention now is on the fiscal
year 1978 budget, the Carter proposals might suggest changes
in budget authority, outlays, or receipts for fiscal year
A-3
1977 that, if accepted by the Congress, would put budget
authority, outlay, or revenue totals out of line with the
second concurrent resolution targets. In this event, the
Congress would be required to pass a third concurrent
resolution for 1977 before action would be taken on the
spring supplemental appropriations bill. (Of course, the
Congress could independently choose to breach the second
resolution totals and pass a third resolution.)
The timing for transmittal of Carter revisions in the
budget is, therefore, even more critical with respect to
fiscal year 1977 than to fiscal year 1978. The Congress can
begin a substantive review of the fiscal year 1977 budget
upon its return -- two weeks before the Ford budget for 1978
is submitted. Moreover, it could choose to take appropriate
action on the third 1977 resolution before completing action
on 1978, thus giving Appropriations Committees the go-ahead
on the spring supplemental. A worsening of the economic
outlook over the next several months might prompt immediate
congressional consideration of revisions to the Second
Concurrent Resolution for 1977. In fact, as indicated in
OMB's recently-issued current services estimates and in CBO
Director Rivlin's recent testimony before the House Budget
Committee, the probability that the receipts estimates
contained in the Second Concurrent Resolution for fiscal
year 1977 are $5 billion to $10 billion too high may require
that the Second Concurrent Resolution be amended.
B
December 10, 1976
Tab B
ECONOMIC ASSUMPTIONS
Economic assumptions significantly affect the budget
outlook. Thus, the first priority in developing revised
estimates for a Carter Administration budget should be to
establish an economic forecast consistent with President-
elect Carter's fiscal policy and reflecting the views of his
economic advisors. This process should be completed before
January 20.
Under the system that is currently in effect, the
Administration's assumptions are developed by first asking
CEA, Treasury, and OMB staff (known collectively as "Troika
3") to forecast the economic outlook consistent with the
fiscal policy assumptions provided by the policy-level
officials. This forecast is then reviewed at the Assistant
Secretary level (Troika 2). It is then reviewed by the
Economic Policy Board, which makes recommendations to the
President for his consideration. (In the Kennedy and
Johnson Administrations, the Director of OMB, the Chairman
of the Council of Economic Advisers, and the Secretary of
the Treasury -- Troika 1 -- reviewed the Troika 2 economic
assumptions and made recommendations to the President.)
A staff forecast generally requires at least 2 full
days. The time required for the policy review depends upon
the complexity or uncertainty of the outlook, the degree to
which policy officials wish to review the staff work, and
the priority the review is accorded.
The forecast in the Ford budget will extend for 2
years, through calendar year 1978.
For calendar years 1979-1982, the economic assumptions
shown in the Ford budget will not be forecasts of probable
economic conditions but, rather, assumptions consistent with
moving toward a relatively stable price level and a higher
level of employment. These are used for the longer-range
budget projections for fiscal years 1979-1982.
SENSITIVITY OF THE BUDGET TO ECONOMIC ASSUMPTIONS
(fiscal years; in billions of dollars)
1978
1979
Outlays
Receipts
Deficit
Outlays
Receipts
Deficit
Effect of one percentage point
higher annual rate of real
growth beginning:
First quarter of CY 1977
.......
-1.5
+6.0
-7.5
-3.0
+12.0
-15.0
First quarter of CY 1978
-0.5
+1.5
-2.0
-1.5
+7.0
-8.5
Effect of one percentage point
higher annual rate of inflation
beginning 1/:
First quarter of CY 1977
+1.0
+6.0
-5.0
+2.5
+11.5
-9.0
First quarter of CY 1978
*
+1.5
-1.5
+1.0
+6.5
-5.5
B-2
1/ Excludes the effect of higher inflation on interest rates of discretionary programs.
* Less than $50 million.
NOTE: If the annual rate of inflation or real growth were lower rather than higher by
one percentage point, the changes in outlays and receipts would be of the
opposite sign, but of similar magnitude to the figures shown above.
10
C
December 10, 1976
Tab C
TAX POLICY AND BUDGET RECEIPTS
:
President Carter presumably will not propose extensive
tax reform in the 1978 budget that he submits on
February 15. (During the course of the campaign he
indicated that it would take at least a year to develop
such proposals.) This presumption needs to be
confirmed or corrected as soon as possible. The
discussion that follows assumes it to be correct.
:
Revising the January budget receipt estimates will be
far less complicated than revising the outlay
estimates. The following are three possible
adjustments:
(1) Change some, if not all, Ford Administration tax
proposals. Relative to outlays, the number of tax
proposals is likely to be small. Although they
may involve large sums, it will be fairly simple to
calculate the effect on the budget if a proposal is
deleted in its entirety.
(2) Decide on specific tax initiatives that President
Carter would like to include in his 1978 budget.
Such proposals, including those that would become
effective in calendar year 1977, should be staffed
out before January 21, and developed in the context
of a review of economic assumptions.
(3) Economic assumptions will have a significant effect
on the receipts estimates. Once the economic
assumptions have been developed, Treasury staff
should be asked to develop receipts estimates
consistent with them. Treasury can usually
generate revised estimates within about 48 hours.
D
December 10, 1976
Tab D
SUGGESTED OUTLINE OF FEBRUARY 15 BUDGET REVISION
The budget document transmitted by President Carter on
about February 15 might consist of an introduction and four
parts, as follows:
Introduction: Nature of the Budget Revision
A brief introduction would explain that:
-- The congressional budget process requires extremely
rapid response from new President to Ford budget.
-- Only major policy issues could be addressed in the
time available.
-- Summary of major changes recommended by the Carter
Administration.
Part I: Message of the President
-- Budget overview and philosophical base.
-- Total changes from Ford budget due to:
revised fiscal outlook and Carter
fiscal policy; and
revised program recommendations.
-- Major tax proposals.
-- Major spending proposals.
-- Future agenda, e.g.: (??)
tax reform; (?)
reorganization; (?)
multi-year budgeting; and (?)
possible initiatives (e.g., health insurance,
welfare reform). (?)
D-2
Part II: Current Economic Outlook and Policies
-- Economic assumptions.
-- Carter fiscal policy.
Part III: Receipts
-- Aspects of Ford program accepted or rejected.
-- Changes proposed by Carter Administration. (?)
-- Schedule for tax reform. (?)
Part IV: Outlays by Function
-- National defense.
-- International affairs.
-- General science, space, and technology.
-- Natural resources, environment, and energy.
-- Agriculture.
-- Commerce and transportation.
-- Community and regional development.
-- Education, training, employment, and social services.
-- Health.
-- Income security.
-- Veterans benefits and services.
-- Law enforcement and justice.
-- General government.
-- Revenue sharing and general purpose fiscal assistance.
-- Interest.
-- Allowances.
-- Undistributed offsetting receipts.
The following is a sample table for this section:
600: INCOME SECURITY
(fiscal years; in millions of dollars)
1977
1978
1976 Ford Carter Ford Carter
Subfunction and Major Program
Actual request request request request
General retirement and disability insurance:
Social security (OASDI)
72,664
$50 Bonus
17
Railroad retirement
3,475
Special benefits for disabled coal miners
1,012
Miscellaneous trust funds
3
Subtotal
77,172
Federal employee retirement and disability
8,174
Unemployment insurance
19,452
D-3
Public assistance and other income
supplements:
Supplemental security income
5,060
Maintenance assistance
5,849
Housing assistance
2,497
Food stamps
5,775
School lunch and other nutrition
2,184
Earned income credit
808
Refugee aid and other
439
Subtotal
22,612
Deductions for offsetting receipts
-1
Total
127,409
D-4
Part V: Supplementary Information and Summary Tables
-- Budget authority by function, subfunction, and
major program (computer generated).
-- Budget authority and outlays by agency.
-- Budget financing and the debt.
-- Federal transactions in the national income accounts.
E
December 10, 1976
Tab E
CHANGING PENDING APPROPRIATIONS REQUESTS
Two sections of the Budget and Accounting Act of 1921
establish the legal requirements for changes to pending
appropriations:
-- Section 201 contains the requirement that the
President (no one else) transmit the initial
budget request, and requires that certain
information be provided in a form determined
by the President.
-- Section 203 (a) authorizes the President to
make changes in the budget that are necessary
on account of laws enacted after transmittal
of the budget or that are otherwise in the
public interest. Change proposals are to be
accompanied by a statement of the reasons for
change.
Procedures have evolved to meet these legal
requirements. Brief -- but technically precise -- formats
are used to transmit to the Congress Presidential requests
for changes to specific appropriation accounts. Additional
technical information and justifications supporting the
brief Presidential transmission are provided by the agencies
directly to the Appropriations Committees. More recently,
the Congressional Budget Office has also obtained technical
information. The information flow that has developed over
the years meets the requirements of the Executive Office of
the President, the executive agencies, and the various arms
of the Congress dealing with appropriations matters, by
providing the information necessary to allow a precise
understanding by each participant of the President's
position on a given request. At the same time, necessary
supporting technical information for congressional review is
also made available. The flow is generally understood and
accepted by the parties concerned, and the substantive
issues of appropriations requests can be dealt with without
process and format considerations intruding.
F
December 10, 1976
Tab F
RESCISSIONS AND DEFERRALS
Legal Requirements
The Impoundment Control Act of 1974 (31 U.S.C. 1400-1407)
and the Antideficiency Act (31 U.S.C. 665) are the general
legal authorities for rescissions and deferrals.
--
Rescissions. Under the Antideficiency Act
(section 3679 (c) (2) of the Revised Statutes, as
amended) reserves may be established in apportion-
ing an appropriation to effect savings whenever
savings are made possible by or through changes in
requirements or greater efficiency of operation.
The Act requires recommendations for rescission
of budget authority to be made whenever it is
determined that an amount will not be required
to carry out the "full objectives and scope" of
the appropriation and, hence, may be "saved." In
addition, the President is required by the Impound-
ment Control Act (section 1012) to report rescission
proposals in special messages whenever he determines:
(1) that budget authority will not be required to
carry out the full objectives and scope of programs
for which it is provided; (2) that such authority
should be rescinded for fiscal policy reasons or
for other reasons; or (3) that funds available for
only one fiscal year are to be reserved for the
entire year. Unless both Houses of the Congress
approve the proposed rescission within 45 calendar
days of continuous session, the funds must be made
available for obligation.
-- Deferrals. Reserves are also permitted to be
established under the Antideficiency Act to provide
for contingencies. The President must report such
reserves to the Congress as deferrals. In addition,
the Impoundment Control Act (section 1013) requires
the reporting of deferrals by the President in
special messages whenever the President, the Director
of OMB, or any other officer or employee of the
United States proposes to defer budget authority
provided for a specific purpose of project. A
deferral remains in effect unless either House of
the Congress disapproves it.
F-2
Each rescission proposal and deferral reported in a
special message is identified by amount and organizational
entity. The justification and estimated effects for each
proposal are supplied in reports that accompany each special
message.
Rescissions Pending
Two rescissions are presently pending before the Congress:
(1) $47.5 million for the Department of the Interior's helium
fund (R77-3) and (2) $6.6 million in construction and planning
funds for Corps of Engineers hopper dredges (R77-2). Both
rescissions were proposed on September 22, 1976, under the
Impoundment Control Act. The 45-day period for congressional
consideration of these rescission proposals will not end until
late in February. (The exact date depends on the congressional
recess schedule for February.) As is noted above, the funds
must be made available if, at the end of the full 45-day
period, the Congress has not completed action on a rescission
bill rescinding all or part of the amount proposed to be
rescinded or that is to be reserved.
Deferrals in Effect
Of the 36 deferrals reported during fiscal year 1977,
35 are now in effect. (All funds reported for road construc-
tion, National Park Service (D77-18) were released pursuant
to Administration action.) Four of the pending deferrals
(totalling $39.2 million) have section 1013 of the Impoundment
Control Act as their only legal authority. That is, they were
not made under the Antideficiency Act to provide for contin-
gencies. They are as follows:
F-3
Budget Authority
Deferral
($ millions)
Health, Education, and Welfare
Special Institutions:
Howard University (D77-35)
0.5
Justice
Federal Prison System:
Buildings and facilities (D77-21).
1.9
State
Administration of Foreign Affairs:
Acquisition, operation, and
maintenance of buildings abroad
(D77-22)
14.2
Transportation
Coast Guard:
Acquisition, construction, and
improvements (D77-23)
22.6
Total
39.2
In the area of rescissions and deferrals, the new Admin-
istration will probably want to review closely the above
rescissions and the four "policy" deferrals. The remaining
31 deferrals (the related funds total approximately $1,943.8
million) are either routine reserves for contingencies, or
deferrals made pursuant to particular laws. They were
implemented largely at the request of the concerned agency,
and do not affect outlays.
Additional Rescissions and Deferrals Likely to be Proposed
by January 20, 1977
Messages proposing additional rescissions and deferrals
are likely to be transmitted by President Ford both in
connection with the 1978 budget and earlier.
Technically, all pending rescissions and deferrals remain
before the Congress unless withdrawn by the President. In
the usual course of events, some deferred funds are released
routinely. The proposed rescissions that are pending before
the Congress when the Carter Administration takes office will,
F-4
under the 45-day rule referred to above, automatically be
made available for obligation around mid-March (depending
upon the congressional recess schedule) if no action is taken
on them by the Congress. The new Administration may want to
consider: (a) endorsing some or all of the proposals and
encouraging congressional action to rescind the funds; or
(b) withdrawing some or all of the proposed rescissions
officially and releasing the funds. These actions should be
taken in time to be reflected in the February 15 transmittal.
G
December 10, 1976
Tab G
CHANGING BASIC LEGISLATION
The Carter Administration may want to use a revised
budget as a vehicle to withdraw legislative proposals of the
Ford Administration, propose changes to existing legislation,
or -- possibly -- propose new legislation.
To withdraw legislative proposals of the Ford Administra-
tion, it is necessary only to exclude them from revised
estimates transmitted to the Congress. Presidential support
for the proposals is thereby removed.
To propose amending existing legislation, to propose new
legislation, or to amend proposals previously transmitted to
the Congress it is generally desirable to have the legislative
proposals or amendments thereto prepared by the time estimates
are released, or shortly thereafter. There would be no major
difficulty, however, with including an estimate of the effects
of a legislative change in the revised estimates and then
following the revision later with a specific proposal.
Under section 607 of the Congressional Budget Act,
proposed legislation authorizing the enactment of new budget
authority is required to be submitted to the Congress not
later than May 15 of the year preceding the year in which such
fiscal year begins. Thus, technically, proposed changes to
existing legislation for fiscal year 1978 should have been
submitted by May 15, 1976, and proposed new legislation for
fiscal year 1979 should be submitted not later than May 15,
1977. As a practical matter as it relates to the Carter
Administration, this means that any proposed new legislation
for fiscal year 1978 should be submitted before May 15, 1977,
the date by which the congressional legislative committees must
report such bills (see Tab A) for consideration by the Congress,
and proposed changes to existing legislation for fiscal year
1979 are due not later than May 15, 1977. However, section 607
does not prevent the President from submitting legislative
initiatives for either year at later dates.
"
I
December 10, 1976
Tab H
POSSIBLE SCHEDULE FOR PREPARATION
OF THE CARTER ADMINISTRATION BUDGET
Development of recommendations by Transition
Teams
Assumed to be in
process
Study by Carter appointees to an agency of
the agency, its recent past budgets, and its
fiscal year 1978 current services estimates
From date of
appointment
Study of Ford budget by OMB Director and
other Carter appointees, with focus on
restraint proposals and initiatives
Beginning
January 15
Cabinet (and major agency) meeting to receive
Presidential guidance on budget
January 21
OMB instructions to agencies providing policy
guidelines and reporting instructions for
changes in Ford budget
January 21
Agency reports due into OMB
January 27
OMB Director reviews agency reports in
context of Ford budget and its restraint
proposals and initiatives
January 27-
February 2
OMB Director recommends to President:
-- those items in Ford budget that
should be supported;
-- those items that should be adjusted
(up or down) to current services
levels; and
-- other changes in Ford budget
February 3
President makes tentative decisions
February 7
President discusses tentative decisions with
OMB Director and agency heads
February 7-8
President makes final decisions
February 9
H-2
OMB:
Submits draft budget message to
President
February 9
Prepares revision of budget
February 9-11
Submits galley of revised budget to GPO
for conversion to page proof
February 11
Obtains President's approval, corrects
final page proof, and signs off
"OK to print"
February 13
President transmits revised budget to the
Congress
February 15
Agencies submit detailed supporting informa-
tion to OMB consistent with revised budget
decisions. (Changes from Ford budget to
reflect only President's decisions on
programs and economic policy; technical
reestimates to be held to a minimum)
February 15-
March 1
Agencies prepare and submit to OMB formal
budget amendments and withdrawals of
deferrals and proposed rescissions or new
deferrals and proposed rescissions
consistent with revised budget decisions, as
necessary, and as soon as possible
February 15-25
OMB reviews and processes agency submissions
of supporting information. Provides detailed
backup information to the Congress*
March 15
OMB reviews and processes formal budget
amendments and withdrawals of deferrals and
proposed rescissions. Forwards to the
President by
March 10
President transmits to the Congress his formal
budget amendments and withdrawals of
deferrals and proposed rescissions by
March 15
* This information and the February 15 budget will meet
(or can be made to meet) legal requirement for the April 10
update of the budget. April 10 is too late to be useful to
the Congress for the First Concurrent Resolution.